Cost of planned health exchange questioned

Thursday

Sep 22, 2011 at 12:01 AMSep 22, 2011 at 9:00 PM

CHICAGO — Republican lawmakers serving on a state panel that is studying creation of a clearinghouse for affordable health insurance and expanded Medicaid coverage expressed some exasperation Wednesday about the potential costs and expansion of government.

DEAN OLSEN

CHICAGO — Republican lawmakers serving on a state panel that is studying creation of a clearinghouse for affordable health insurance and expanded Medicaid coverage expressed some exasperation Wednesday about the potential costs and expansion of government.

State Rep. JoAnn Osmond, R-Antioch, wondered out loud whether the executive director of Illinois’ health-benefits exchange should be paid as much as $235,000, as consultants working for the state have recommended.

“That’s not government-level,” she said at a meeting of the Illinois Health Benefits Exchange Legislative Study Committee.

Rep. Darlene Senger, R-Naperville, said she is concerned the consultants aren’t focusing on using the private sector enough.

A report from Wakely Consulting Group and Health Management Associates, released last week, said the exchange, expected to serve 1 million Illinoisans annually in 2014 and beyond, would cost $57 million to $89 million a year to operate and would employ about 50 people.

The exchange would dole out federal subsidies made available through the federal Affordable Care Act to help individuals and small businesses afford premiums and offset other out-of-pocket costs.

The operational costs of the exchange could be paid with proposed new fees on the insurance industry that potentially could add 2 to 3 percent to the cost of premiums for plans offered through the exchange.

If the assessments were spread over the entire health-insurance market, the surcharge on premiums would be as low as 0.3 percent, the consultants said.

Rep. Frank Mautino, D-Spring Valley, said he wasn’t surprised by the salary-related cost estimates. Experienced actuaries and other experts can demand handsome salaries in the private sector, he said.

The committee of six Republican and six Democrats is expected to issue a report to the General Assembly by about Sept. 30 on how the exchange could be funded and governed.

Consultants and members of the Quinn administration urged swift action by the legislature so the state can qualify for full federal subsidies to pay the exchange’s startup costs and insurance companies will have time to develop products to sell on the exchange.

About 1 million of Illinois’ 1.5 million uninsured residents would gain coverage through the exchange, Gross said. An estimated 397,000 more people would qualify for Medicaid coverage through the exchange, and the remaining 600,000 would get private coverage.